Personal Finance

When the European Union decided to fine Apple €13.5 billion for tax evasion in Ireland last week, it didn’t take long for the Irish government to join with Apple to announce it would appeal the ruling.

Over 31 million consumers in Vietnam researched or purchased a product online in 2015. Just ten years ago, internet connectivity was only starting to become common. Digitization is changing how people trade. There are even more dramatic changes happening under the hood. The way trade is financed, processed and regulated has entered a period of disruption. We take this opportunity to consider the short and long-term implications of digitization of the trade process.

Although the Coalition government has been reinstated, it is still faced with the problem of dealing with multinational tax avoidance. The issue escaped a lot of scrutiny during the election campaign and the current measures designed to address the issue fail to deal with the most common form of avoidance - interest deductions on intra-group debt.

The FTSE Italian bank index was down nearly 40% this year through the day of the UK referendum. It fell another 33% from the results of the referendum to the middle of last week.

In recent days, investors appear to have become more optimistic that the political will from the EU and Italy is sufficient to avert a full-fledged banking crisis. The FTSE Italian bank index rose almost 8% today, posting its fourth consecutive advancing session, over which time it has risen about 24%. It leaves the bank index off around 18% since June 24.

Last month, the Federal Reserve announced that 31 out of 33 U.S. banks had passed its latest “stress test,” designed to ensure that the largest financial institutions have enough capital to withstand a severe economic shock.

After the 2007-2008 bank recapitalization by governments, which means taxpayers' money, Europe changed the rules. The new rules require that private investors be "bailed in" before the bank is "bailed out."

Europe's fastidious with rules allows for exceptions and flexibility. Italy is pushing for this flexibility now, and Portugal is watching closely because its largest bank also may require recapitalization.

New standards on how much businesses can surcharge their customers for credit or debit card purchases start in September. However, it’s not clear how the rules will be policed and whether this will lead to all businesses enforcing a surcharge, rather than just those who choose to.

How exceptional are market developments? Much rests on the answer. If these are extraordinary circumstances, then Japanese intervention becomes more likely. Of course, Japanese policymakers have been inclined to intervene before the UK referendum but were seemingly rebuffed by its G7 partners.

In Europe, the designation of "exceptional circumstances" is critical. Such a designation could soften the EU strictures. Italy is on the leading the push in this direction.

In India’s most recent budget, Finance Minister Arun Jaitley formally announced that it would slash the number of Indian public sector banks from the current 27 to just 10. Consolidating India’s public sector banks will result in improved efficiency, greater economies of scale and large-scale financial institutions that can cater to the needs of a growing economy.

Large established firms increasingly rely on external sources for innovation. One way these firms are seeking to foster innovative activity is via corporate venture capital programs.

According to the National Venture Capital Association (NVCA), established firms invested more than US$4 billion in venture businesses in 2014, representing more than 10% of all venture capital investments in the US during the year.

The idea of separating out the arms of the “Big Four” banks like insurance and superannuation from their core banking business is gaining traction in Australia. It featured in the Greens' banking and finance election policy. However, this is not a new idea; Australia is just catching up to banking reforms already made by the UK.

Due to innovations in financial technology and changes in the enabling environment, the number of financially excluded adults across Asia and the Pacific has dropped to about 1 billion.

Increased access to affordable financial services can be a lever for Asians to smooth consumption, manage risk and improve their lives through better savings options, access to credit, and cheaper payments or remittances.

Any change in taxation invariably raises questions about distribution. Who loses, who wins – and who loses most – will always be an issue. However, such analysis should be applied with care, lest it miss the bigger picture.